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Former Bay Area exporter charged with sale of sensitive technology to China

Defendant allegedly sold restricted microwave amplifier technology to the People's Republic of China without a license

SAN JOSE, Calif. - A former Bay Area man, and two companies he founded, have been indicted by a grand jury here for conspiring to ship sensitive microwave amplifier technology to the People's Republic of China without obtaining the required licenses and then lying to federal agents about those activities.

Fu-Tain Lu, 61, formerly of Cupertino, Calif., and two companies he founded - Fushine Technology, Inc. ("Fushine") of Cupertino, Calif., and Everjet Science and Technology Corporation ("Everjet"), based in the People's Republic of China ("the PRC") - are accused of conspiring to violate U.S. export laws by failing to obtain the required licenses or other approvals from the United States Department of Commerce before shipping the sensitive items. The indictment alleges the items Fushine shipped and attempted to ship were restricted for export to China for reasons of national security.

The indictment is the result of a long-term joint investigation by U.S. Immigration and Customs Enforcement (ICE), the Department of Commerce Office of Export Enforcement and the Federal Bureau of Investigation, with additional support from U.S. Customs and Border Protection.

The indictment alleges the defendants knew about the licensing restrictions and specifically sought to circumvent them. The indictment quotes from an internal company e-mail in which an Everjet employee told a Fushine employee, "Since these products are a little bit sensitive, in case the maker ask you where the location of the end user is, please do not mention it is in China." The indictment also quotes from another e-mail in which Lu advises a subordinate to pretend that the intended end-user for an item is in Singapore rather than China.

"Exporters may consider the requirement that they obtain a license before shipping controlled technology to restricted countries to be burdensome, yet those regulations are necessary to protect the security of the United States," said Joseph P. Russoniello, U. S. attorney for the Northern District of California. "My office will vigorously prosecute willful violations of export regulations to the fullest extent of the law."

The indictment was returned April 1, but remained under seal until the defendant's arrest and appearance in federal court here today.

Lu was arrested at the San Francisco International Airport after disembarking from a flight on the evening of April 7. He made his initial appearance in federal court in San Jose today before United States Magistrate Judge Patricia V. Trumbull. Judge Trumbull ordered the defendant held without bail until his detention hearing, which is set for April 13.

The indictment charges Lu with four separate counts, one count of conspiring to violate export regulations, two counts of making false statements to a government agency, and one count of violating U.S. export regulations. If convicted on all of the charges, Lu faces a maximum penalty of 25 years in prison.

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